The Premier says it’s difficult to nail down an exact dollar figure in terms of revenues lost due to the heavy drop in oil prices, but it is in the hundreds of millions.
Dwight Ball says the price of oil has had a drastic impact and production levels were already down, heading into the COVID-19 pandemic.
Many tanks in many areas are at capacity, says Ball. Adding to that, one of the difficulties is around demand.
Ball says people are traveling less, so the demand for gasoline, oil, and diesel fuels has decreased dramatically. In this province, it means a drastic decrease in revenues, and will have a major impact on revenue streams provided to Newfoundland and Labrador.
In addition to that, the Premier says there have been changes to exploration in the offshore as a result of the low oil prices.
Right now, Ball claims that there has been no discussion around any decision on asking oil producers to slow or stop production, nor is it something they want to do.
Ball says there are less than 300,000 barrels of oil being produced per day in Newfoundland and Labrador. Further, he says that has a major impact on the province, but not a big impact on national production.
Ball says it’s important that they continue to make the argument to the federal government on just how important the oil and gas sector is to the province, and that supports will be required to come out of this.
As for the need for more borrowing, he says that will largely depend on the federal government’s response to the oil and gas sector.